THE BUILDING AND OTHER CONSTRUCTION WORKERS’ 
WELFARE CESS ACT, 1996 
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ARRANGEMENT OF SECTIONS 
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SECTIONS 

1.  Short title, extent and commencement. 
2.  Definitions. 
3.  Levy and collection of cess. 
4.  Furnishing of returns. 
5.  Assessment of cess. 
6.  Power to exempt. 
7.  Power of entry. 
8.  Interest payable on delay in payment of cess. 
9.  Penalty for non-payment of cess within the specified time. 
10.  Recovery of amount due under the Act. 
11.  Appeals. 
12.  Penalty. 
13.  Offences by companies. 
14.  Power to make rules. 
15.  Repeal and saving. 

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THE BUILDING AND OTHER CONSTRUCTION WORKERS’ 
WELFARE CESS ACT, 1996 

ACT NO. 28 OF 1996 

An Act to provide for the levy and collection of a cess on the cost of construction incurred by 
employers with a view to augmenting the resources of the Building and Other Construction 
Workers’  Welfare  Boards  constituted  under  the  Building  and  Other  Construction  Workers 
(Regulation of Employment and Conditions of Service) Act, 1996. 

BE it enacted by Parliament in the Forty-seventh Year of the Republic of India as follows:— 

1.  Short  title,  extent  and  commencement.—(1)  This  Act  may  be  called  the  Building  and  Other 

[19th August, 1996.]  

Construction Workers’ Welfare Cess Act, 1996. 

(2) It extends to the whole of India. 

(3) It shall be deemed to have come into force on the 3rd day of November, 1995. 

2. Definitions.—In this Act, unless the context otherwise requires,— 

(a) “Board” means a Building and Other Construction Workers’ Welfare Board constituted by a 
State  Government  under  sub-section  (1)  of  section  18  of  the  Building  and  Other  Construction 
Workers (Regulation of Employment and Conditions of Service) Act, 1996 (27 of 1996); 

(b) “Fund” means the Building and Other Construction Workers’ Welfare Fund constituted by a 

Board; 

(c) “prescribed” means prescribed by rules made under this Act;  

(d)  words  and  expressions  used  herein  but  not  defined  and  defined  in  the  Building  and  Other 
Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (27 of 1996) 
shall have the meanings respectively assigned to them in that Act. 

3. Levy and collection of cess.—(1) There shall be levied and collected a cess for the purposes of the 
Building  and  Other  Construction  Workers (Regulation  of  Employment  and  Conditions  of  Service)  Act, 
1996 (27 of 1996), at such rate not exceeding two per cent. but not less than one per cent. of the cost of 
construction  incurred  by  an  employer,  as  the  Central  Government  may,  by  notification  in  the  Official 
Gazette, from time to time specify. 

(2) The cess levied under sub-section (1) shall be collected from every employer in such manner and 
at  such  time,  including  deduction  at  source  in  relation  to  a  building  or  other  construction  work  of  a 
Government or of a public sector undertaking or advance collection through a local authority where an 
approval  of  such  building  or  other  construction  work  by  such  local  authority  is  required,  as  may  be 
prescribed. 

(3) The proceeds of the cess collected under sub-section (2) shall be paid by the local authority or the 
State Government collecting the cess to the Board after deducting the cost of collection of such cess not 
exceeding one per cent. of the amount collected. 

(4) Notwithstanding anything contained in sub-section (1) or sub-section (2), the cess leviable under 
this  Act  including  payment  of  such  cess  in  advance  may,  subject  to  final  assessment  to  be  made,  be 
collected at a uniform rate or rates as may be prescribed on the basis of the quantum of the building or 
other construction work involved. 

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Uttar Pradesh 

STATE AMENDMENTS 

Amendment  of  section  3  of  Act  no.  28  of  1996.—In  section  3  of  the  Building  and  Other 
Construction  Workers’  Welfare  Cess  Act,  1996,  in  sub-section  (1)  the  following  explanation  shall  be 
inserted at the end, namely:- 

“Explanation:-For  the  purpose  of  levy  of  cess  under  this  sub-section  cost  of  construction  shall 
include  all  expenditure  incurred  by  an  employer  in  connection  with  the  building  or  other  construction 
work but shall not include- 

(a) cost of land; 

(b)  any  compensation  paid  or  payable  to  a  worker  or  his  dependents  under  the  Employees’s 

Compensation Act, 1923; 

(c)  expenditure  uncured  on  such  plant,  equipments  installed  or  upgraded  which  are  not  part  of 

construction activity; 

(d)  machines  such  as  MRI,  CT  Scan,  Dialysis  machine  etc.  used  for  treatment  of  patients  in 

hospitals.” 

[Vide the Uttar Pradesh Act 28 of 2018, s. 2] 

4. Furnishing of returns.—(1) Every employer shall furnish such return to such officer or authority, 

in such manner and at such time as may be prescribed. 

(2)  If  any  person  carrying  on  the  building  or  other  construction  work,  liable  to  pay  the  cess  under 
section 3, fails to furnish any return under sub-section (1), the officer or the authority shall give a notice 
requiring such person to furnish such return before such date as may be specified in the notice. 

5.  Assessment  of  cess.—(1)  The  officer  or  authority  to  whom  or  to  which  the  return  has  been 
furnished under section 4 shall, after making or causing to be made such inquiry as he or it thinks fit and 
after satisfying  himself  or itself that  the  particulars  stated  in  the  return are  correct,  by  order,  assess the 
amount of cess payable by the employer. 

(2) If the return has not been furnished to the officer or authority under sub-section (2) of section 4, 
he or it shall, after making or causing to be made such inquiry as he or it thinks fit, by order, assess the 
amount of cess payable by the employer. 

(3) An order of assessment made under sub-section (1) or sub-section (2) shall specify the date within 

which the cess shall be paid by the employer. 

6. Power to exempt.—Notwithstanding anything contained in this Act, the Central Government may, 
by  notification  in  the  Official  Gazette,  exempt  any  employer  or  class  of  employers  in  a  State  from  the 
payment  of  cess  payable  under  this  Act  where  such  cess  is  already  levied  and  payable  under  any 
corresponding law in force in that State.  

7. Power of entry.—Any officer or authority of the State Government specially empowered in this 

behalf by that Government may— 

(a) with such assistance, if any, as he or it may think fit, enter at any reasonable time any place 
where  he  or  it  considers  it  necessary  to  enter  for  carrying  out  the  purposes  of  this  Act  including 
verification of the correctness of any particulars furnished by any employer under section 4; 

(b) do within such place anything necessary for the proper discharge of his or its duties under this 

Act; and 

(c) exercise such other powers as may be prescribed.  

8. Interest payable on delay in payment of cess.—If any employer fails to pay any amount of cess 
payable under section 3 within the time specified in the order of assessment, such employer shall be liable 
to pay interest on the amount to be paid at the rate of two per cent. for every month or part of a month 
comprised in the period from the date on which such payment is due till such amount is actually paid. 

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9. Penalty for non-payment of cess within the specified time.—If any amount of cess payable by 
any employer under section 3 is not paid within the date specified in the order of assessment made under 
section 5, it shall be deemed to be in arrears and the authority prescribed in this behalf may, after making 
such inquiry as it deems fit, impose on such employer a penalty not exceeding the amount of cess: 

Provided  that,  before  imposing  any  such  penalty,  such  employer  shall  be  given  a  reasonable 
opportunity of being heard and if after such hearing the said authority is satisfied that the default was for 
any good and sufficient reason, no penalty shall be imposed under this section. 

10.  Recovery  of  amount  due  under  the  Act.—Any  amount  due  under  this  Act  (including  any 

interest or penalty) from an employer may be recovered in the same manner as an arrear of land revenue. 

11. Appeals.—(1) Any employer aggrieved by an order of assessment made under section 5 or by an 
order imposing penalty made under section 9 may, within such time as may be prescribed, appeal to such 
appellate authority in such form and in such manner as may be prescribed. 

(2)  Every  appeal  preferred  under  sub-section  (1)  shall  be  accompanied  by  such  fees  as  may  be 

prescribed. 

(3) After the receipt of any appeal under sub-section (1), the appellate authority shall, after giving the 

appellant an opportunity of being heard in the matter, dispose of the appeal as expeditiously as possible. 

(4) Every order passed in appeal under this section shall be final and shall not be called in question in 

any court of law. 

12.  Penalty.—(1)  Whoever,  being  under  an  obligation  to  furnish  a  return  under  this  Act,  furnishes 
any  return  knowing,  or  having  reason  to  believe,  the  same  to  be  false  shall  be  punishable  with 
imprisonment which may extend to six months, or with fine which may extend to one thousand rupees, or 
with both. 

(2) Whoever, being liable to pay cess under this Act, wilfully or intentionally evades or attempts to 
evade the payment of such cess shall be punishable with imprisonment which may extend to six months, 
or with fine, or with both. 

(3) No court shall take cognizance of an offence punishable under this section save on a complaint 

made by or under the authority of the Central Government. 

13.  Offences  by  companies.—(1)  Where  an  offence  under  this  Act  has  been  committed  by  a 
company,  every  person  who,  at  the  time  the  offence  was  committed,  was  in  charge  of,  and  was 
responsible to, the company for the conduct of the business of the company, as well as the company, shall 
be  deemed  to  be  guilty  of  the  offence  and  shall  be  liable  to  be  proceeded  against  and  punished 
accordingly:  

Provided  that  nothing  contained  in  this  sub-section  shall  render  any  such  person  liable  to  any 
punishment if he proves that the offence was committed without his knowledge or that he had exercised 
all due diligence to prevent the commission of such offence. 

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been 
committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, 
manager, secretary or other officer of the company, such director, manager, secretary or other officer shall 
also  be  deemed  to  be  guilty  of  that  offence  and  shall  be  liable  to  be  proceeded  against  and  punished 
accordingly. 

Explanation.—For the purposes of this section,— 

(a) “company” means any body corporate and includes a firm or other association of individuals; 

and 

(b) “director”, in relation to a firm, means a partner in the firm.  

14. Power to make rules.—(1) The Central Government may, by notification in the Official Gazette, 

make rules for carrying out the provisions of this Act. 

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(2) Without prejudice to the generality of the foregoing power, such rules may provide for all or any 

of the following matters, namely:— 

(a)  the  manner  in  which  and  the  time  within  which  the  cess  shall  be  collected  under  

sub-section (2) of section 3; 

(b) the rate or rates of advance cess leviable under sub-section (4) of section 3; 

(c) the particulars of the returns to be furnished, the officer or authority to whom or to which such 
returns shall be furnished and the manner and time of furnishing such returns under sub-section (1) of 
section 4; 

(d) the powers which may be exercised by the officer or authority under section 7; 

(e) the authority which may impose penalty under section 9; 

(f) the authority to which an appeal may be filed under sub-section (1) of section 11 and the time 

within which and the form and manner in which such appeal may be filed; 

(g) the fees which shall accompany an appeal under sub-section (2) of section 11; and 

(h) any other matter which has to be, or may be, prescribed. 

(3) Every rule made under this Act shall be laid, as soon as may be after it is made, before each House 
of  Parliament,  while  it  is  in  session  for  a  total  period  of  thirty  days  which  may  be  comprised  in  one 
session  or  in  two  or  more  successive  sessions,  and  if,  before  the  expiry  of  the  session  immediately 
following the session or the successive sessions aforesaid, both Houses agree in making any modification 
in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only 
in such modified form or be of no effect, as the case may be; so, however, that any such modification or 
annulment shall be without prejudice to the validity of anything previously done under that rule.  

15.  Repeal  and  saving.—(1)  The  Building  and  Other  Construction  Workers’  Welfare  Cess  Third 

Ordinance, 1996 (Ord. 26 of 1996), is hereby repealed. 

(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance shall be 

deemed to have been done or taken under the corresponding provisions of this Act.  

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